VBVI, our VIX-based short-term volatility indicator dipped to 88.3% Tuesday from 89.1% on Monday. Most recent VBVI statistical low was13.6% made on August 30. Into August 5 short-term high VBVI was at 98.3%.

Daily MAAD was negative again Tuesday with 7 issues higher and 13 lower. Indicator remains above uptrend line stretching back to last November lows and continues to correct recent “Overbought” conditions on short term. Daily MAAD Ratio was last near “Neutral” at 1.10.

Daily CPFL was negative by 1.19 to 1 Tuesday and indicator dipped to new short to intermediate-term low and lowest level since March 14 when S&P 500 was quoted near 1560. Indicator remains below long-term uptrend line stretching back to October 2011. CPFL Daily Ratio was last in the upper reaches of “Oversold” territory at .87.

While Daily MAAD remains somewhat stronger than S&P 500, Daily CPFL sank to new low Tuesday and lowest level since last March to suggest that options crowd has continued to view recent market strength with increasing skepticism and has been buying more puts on Dollar Value basis than calls.

But until there is confirmed reversal of new short-term negative with selling below lower edges of 10-Day Price Channels, we cannot preclude possibility selling since last Thursday could prove to be nothing but a lull in Minor Cycle positive within context of still positive intermediate and long-term cycles.

We are concerned, however, about price-based “Overbought” readings on near-term and lingering vulnerability by short-term Momentum and our volatility-based indicator, VBVI.

Most of what indexes have had going for them is that new highs have been made with possibility remaining that further gains could follow. MAAD may be more accurately reflecting Smart Money tendencies than other breadth-based indicators. Nothing but new short-term negative after upside failure would reverse positive possibilities.

Index

Price Channel Stops (10-Bar MAs of Highs/Lows )

Weekly

Monthly

9/23

9/24

9/25

9/26

9/27

9/27

9/30

S&P 500 Index

SELL1673.16

SELL1679.47

SELL1685.08

SELL1693.17

SELL1697.97

SELL1654.26

SELL1448.73

Dow Jones Industrials

SELL15156.30

SELL15239.51

SELL15303.52

SELL15383.57

SELL15418.60

SELL15160.93

SELL13465.21

NASDAQ Composite

SELL3690.85

SELL3700.73

SELL3710.68

SELL3726.33

SELL3738.26

SELL3561.72

SELL3044.23

Value Line Index

SELL3921.72

SELL3937.46

SELL3951.51

SELL3972.26

SELL3986.37

SELL3847.32

SELL3180.51

Note: Stop levels, a function of the extant trend, are based on the trailing moving average price channels for the Highs or the Lows of an index. Whether or not a specific index is suggesting a “Buy” or Sell” is determined by whether or not index prices are above or below the current channel Stop levels. Stop levels should only be used as an entry or exit guide and in conjunction with other market entry and exit strategies.